Nigerian Breweries Plc has announced a strategic Business Recovery Plan to address recent financial challenges. The company plans to raise up to ₦600 billion through a Rights Issue, as communicated to the Nigerian Exchange Limited (NGX). This initiative follows a net loss of approximately N106 billion in 2023, attributed to factors such as increased operational costs, inflation, and foreign exchange volatility.
The Rights Issue will be proposed at the Annual General Meeting on April 26, 2024. It aims to improve the company's financial standing by reducing debt burdens. In 2023, Nigerian Breweries recorded net finance expenses of N189 billion, primarily due to a foreign exchange loss of N153 billion from naira devaluation.
Hans Essaadi, Managing Director/CEO of Nigerian Breweries Plc, emphasized the importance of this action in their recovery plan. He stated: “Despite taking significant mitigating actions, the recent acceleration of the devaluation of the Naira, the lack of access to hard currency, and high interest rates has led to significant pressure on the net profit of Nigerian Breweries. This is not sustainable and now is the appropriate time to repair the balance sheet by using the proceeds of the rights issue to reduce the company’s debt.”
Essaadi also noted that this move aligns with their long-term commitment to Nigeria: “We have been here in Nigeria for more than 77 years and, while it has been challenging in recent times for many Nigerian businesses, we believe in the long-term growth of the Nigerian market as evidenced by our decision to offer this Rights Issue.”
He further expressed commitment towards stakeholders and community impact: “We remain wholly committed to having a positive impact on our host communities and our consumers; leveraging our strong supply chain footprint; excellent execution of our route-to-market strategy; and our rich portfolio of longstanding and innovative beverage brands across various categories.”
Recently, Nigerian Breweries expanded its portfolio by acquiring an 80% stake in Distell Wines and Spirits Limited. This acquisition reflects its strategy for long-term value creation.
Nigerian Breweries Plc remains a key player in Nigeria's brewing industry since its establishment in 1946. It continues its dedication to producing quality beverages with ethically sourced materials.
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